In today’s rapidly evolving global marketplace, one tool that businesses operating in the UAE and expat individuals should not overlook is the UAE Tax Residency Certificate (TRC). A TRC provides significant tax benefits, especially when it comes to avoiding double taxation and ensuring compliance with international tax treaties.
What is a UAE Tax Residency Certificate?
A UAE Tax Residency Certificate (TRC) is an official document issued by the UAE Ministry of Finance, verifying that an individual or a business is a tax resident of the UAE. This certificate is particularly valuable for businesses engaged in international operations, as it allows them to benefit from the Double Taxation Avoidance Agreements (DTAAs) signed between the UAE and other countries. This means that if you’re conducting business in another country, you can avoid paying taxes in both that country and the UAE on the same income. The UAE has signed over 135 DTAAs, making it one of the most favorable locations globally for businesses looking to avoid double taxation.
By securing a TRC, your company can significantly reduce or even eliminate tax liabilities in foreign jurisdictions, positioning your business for sustainable global growth.
Who is Eligible to Apply for a UAE TRC?
Eligibility for a UAE Tax Residency Certificate extends to both corporate entities and individuals:
- Businesses: Companies incorporated in the UAE that conduct substantial business activities within the country can apply for a TRC. They need to demonstrate that they are physically present and operational in the UAE.
- Individuals: UAE residents who have lived in the UAE for at least 183 days in a calendar year can apply for a TRC to avoid double taxation on foreign income.
Pro Tip: Having a TRC provides peace of mind for business owners and investors, as it helps streamline international tax compliance, protecting your profits from being taxed twice in different jurisdictions.
Requirements for Applying for a UAE TRC
If you’re thinking about applying for a TRC, you’ll need to prepare certain documents based on whether you’re applying as an individual or as a business.
For Companies:
- Trade License
- Memorandum of Association (MoA)
- Proof of Authorization (referenced in the MOA or Power of Attorney)
- Audited Financial Statements for the requested financial year or the year before.
- Bank Statement (issued by a local bank covering 6 months within the relevant financial).
- Certified Lease agreement / tenancy contract for the office
For Individuals:
- Passport
- Emirates ID
- Valid Residence Permit
- Certified Residential Lease Agreement
- Source of income or salary certificate
- Proof of permanent residence
- Certified lease agreement or electricity bill (in the applicant’s name)
- Title deed (private-owned property).
- A bank statement issued by a local bank covering 6 months within the financial year related to the request
Sources of Income:
- For self-employed individuals – Trade License and Share Certificate.
- For property owners using rental income – Lease Agreement if the property is leased.
- If the applicant is retired – a letter addressed to the FTA stating that they are using their own savings, bonds, or investments and an official supporting document.
- If the applicant is sponsored by their spouse- Salary Certificate of the sponsor, Marriage Certificate or proof of the sponsor’s income.
Quick Tip: Ensure that all your documents are up to date and certified where required. Missing or outdated documents can delay the process.
Our team of experts can guide you on the optimal approach to your tax residency, ensuring that your company remains compliant with UAE tax regulations while enjoying the benefits of double taxation treaties.
If you’re looking to apply for a TRC or need help with corporate tax and international tax planning, feel free to contact us. At JAKS, we specialize in helping businesses unlock growth opportunities through expert tax advisory services.
